November 23, 2016

With a 20-page ruling yesterday, a federal court in Texas has issued a nationwide preliminary injunction blockingthe implementation of the Department of Labor’s new overtime rules, which were set to go into effect on December 1, 2016.

Those new rules would have increased the salary threshold for the “white collar” exemptions under the Fair Labor Standards Act from just over $24,000.00 per year to nearly $48,000.00 per year, but because of this preliminary injunction, those rules will notgo into effect — at least for now.

The court noted that under the FLSA, whether these exemptions apply requires consideration of not only the amount the employee’s pay, but also the employee’s duties. The court reasoned that by nearly doubling the salary test, the DOL overstepped its authority and essentially supplanted the duties test with the salary test. That, the court noted, is the responsibility of Congress, not the DOL.

What this means for employers is that for now, they may continue to use the existing salary threshold ($455.00 per week; $23,660.00 per year) when evaluating whether these exemptions apply to their employees. This does not, however, change the fact that in order to qualify for these exemptions, employees must still meet one of the “duties” tests set forth in the FLSA.

Also, it is important to note that the judge only issued a preliminary injunction, and it is subject to appeal. Therefore, it is possible that this decision could be overturned, but for the time being employers may continue to apply the current salary threshold.

The comments posted in this article are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.